Personal Financing with a Bad Credit Rating

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Personal Financing with a Bad Credit Rating

If you are having trouble staying afloat with your personal finances rest assured that your most certainly not alone in your struggle. I know that may not be much comfort but just something to keep in mind. With the full effect of the Bush economy now upon us in 2009 millions of people in America are finding it very difficult to keep up with their debt management and their financial responsibilities. If you are one of those people who is burdened with a bad credit rating there are ways you can improve your situation.

It is important to understand that bad credit is something we end up with from years of neglect and that practices. It is just like a bad diet or lifestyle in that it takes years of neglect to damage yourself, but you can rebound and cleanup your personal finances over time. This is one that takes patience and perseverance – you must take it easy on yourself and don’t beat yourself up too much, and get along with the repair of your FICO score and credit rating.

When coming to terms with your credit rating you have to face the reality that borrowing money to pay down your bad debt will cost you more than the average consumer who has a slightly higher FICO score and payment history. You will be paying approximately 2% to 4% more interest on your money then somebody with a good credit rating.

I know that this can be a frustrating epiphany for you and your family but the good news is millions of people have been your shoes before and they have managed to dig themselves out of their bad credit situation. This takes time and careful planning along with tough decisions and frugal spending habits. This is just as difficult as going on a crash diet in that we get used to a particularly lackadaisical lifestyle and it is hard to turn back the clock. Once again the good news is You Can Do It!

Lenders who cater to consumers with bad credit also charge more for fees such as mortgage servicing and loan servicing. We need to do our homework and get some advice from experts who have an objective point of view and a professionals experience with helping people like yourself regain their good credit rating and financial stature.

Nine times out of ten banks and lenders will insist that you have some form of collateral, security, assets, or cosigner attached to the loan agreement if you are going to be approved for some form of debt consolidation. If you are deeply in debt to the tune of over say $60,000 or more of pure credit card debt you are very likely teetering towards personal bankruptcy, unless of course you have a major financial windfall in the works. But since you are likely like the most of us you’ll have to look a getting some form of consumer settlement set up with a bank trustee.

We we get people here visiting Financing USA everyday who are in the same financial mess that you are and they are looking for unsecured loans. This is very difficult come by and you have to have some form of serious employment with a long track record of steady employment in order for you to be even considered for an unsecured loan. Usually you will never find this kind of financing at a major conventional bank – usually you can find this kind of unsecured loan at a local credit union. If the credit Union is hungry enough and they have some faith in your ability to make payments on your debt consolidation loan you may be able to convince them to take a chance on you. Let us face it, since the dawn of banking it has always been about trust and risk management from the point of view of the bankers.

What ever you do try to avoid using payday loans or high interest cash advance type loans. This can start a cycle that is hard to come out of, and only add to your problems and hurt your credit rating even more. Some of these payday loan companies will charge you an APR of over 350%. When someone suggest you getting a short-term cash advance for one of these online payday loan lenders by advice to you is to run for the hills.

I hope that this article will easy you in to the new reality you must face regarding your personal finances. Keep on searching and keep on reading until you fully grasp the realities of bad credit, debt consolidation, your FICO score, and your options in digging yourself out of the financial hole you now find yourself in. Remember once again, that your situation is not new or unique, and there is no reason to give up hope.